Economics Answers

Explain why an increase in saving in the Solow model has a level effect but not a growth

effect.

A) Discuss the steady state condition in the Solow model with population growth and no

technological progress.

B) In the Solow model with no population growth and no

technological progress, explain the golden rule level of consumption. Use a diagram to

discuss your answer.

C) When it would be possible to increase output per unit of labour

even at the steady state? Discuss.

What constitutes the knife-edge instability problem in the Harrod model? Give a formal 

proof and illustrate with an example.

As of September 2021, the population (16+ years of age) in the U.S. is 263

million people. The labor force participation rate is 61%, and the unemployment rate

is 4.8%. What is the employment level?

What is the new price if the government impose K2.00 to K10.00?

3. The production function of a firm is described by the following equation 𝑸=𝟏𝟎,𝟎𝟎𝟎𝑳−𝟑𝑳 𝟐 where L stands for the units of labor.

a) Draw a graph for this equation. Use the quantity produced in the y-axis, and the units of labor in the x-axis.

b) What is the maximum production level?

c) How many units of labor are needed at that point?

Sonja Cc is a small firm that make outfits for customers tailored for their functions, in May 2021 she was order for a baby shower (BS).

The details Job for BS are as follows:

Direct materials: 120 units at N124

Direct labour: 20 hours for department A at N$25 per hour.

10 hours for department B at N30 per hour

12 hour s for department C at N$27.50

The firm allocates manufacturing overheads budgeted at N$2500 in department A, N$2000 in department B and N$3000 in department C.

The firm expects a profit of 55% on the total cost of BS.

Required:

a)Calculate the cost of a baby shower (BS)

b)Calculate the selling price of a baby shower (BS)

c)If the number of outfits are the same for each type of function, which function should Sonja choose to produce and why?

The short-run cost function of a company = TC=200+55y( tc,y measured in thousands)

a) what is the fixed cost ?

b) ıf the company produces 100.000 units of output, what would be the AVC ?

c) what would be its marginal cost (y=100.000)

d) what would be its average fixed cost (y=100.000)

e)suppose that company expounds, its production capacity, therefore, fixed cost increases by $50.000, but its variable cost falls to $ 45.000 per1000 units write the new cost equation?

f)Suppose the company borrows money and expands its factory. Its fixed cost rises by $50.000, but its variable cost falls to $45.000 per 1000 units. The cost of interest ( ) also enters into the equation. Each 1 -point increase in the interest rate raises costs by $3000 Write the new cost equation

Explain the purpose of regulating the boundaries that exist with the financial system

What is interest rate (or price) risk?